nep-afr New Economics Papers
on Africa
Issue of 2024‒03‒18
six papers chosen by
Sam Sarpong, Xiamen University Malaysia Campus

  1. Long Run Money Superneutrality Evaluation of the Relevance of Money in Africa: An ARDL Approach By Mogaji, Peter Kehinde
  2. Mobile Money Taxes: Knowledge, Perceptions and Politics. The Case of Ghana By Abounabhan, Mary; Diouf, Awa; Santoro, Fabrizio; Sakyi-Nyarko, Carlos; Scarpini, Celeste
  3. Are Mini-Grid Projects in Tanzania Financially Sustainable? By E. Zigah; M. Barry; Anna Creti
  4. The impact of the industrialized nation’s CO2 emissions on climate change in Sub-Saharan Africa: Case studies from South Africa, Nigeria and the DR Congo By Kohnert, Dirk
  5. Child Rights, Traditions and Health Seeking Behavior in Nigeria By Mahar, Hamad
  6. Effect of Informal Employment on Overeducation in Developing Countries with a focus on the Democratic Republic of Congo (DRC) By Cedrick Kalemasi Mosengo; Christian Zamo Akono

  1. By: Mogaji, Peter Kehinde
    Abstract: Neutrality of money holds that the real economy is not affected by the level of the money supply level. Superneutrality of money as a property stronger than neutrality of money connotes that the rate of money supply growth has no effect on real variables. The hypothesis of money superneutrality is about what the long run relationship between money supply growth and growth in real output and changes in price levels and what these suggest for the use of monetary aggregates in the conduct of monetary policy. This paper assesses the validity of the hypothesis of money superneutrality in the long run by gathering empirical evidence for 50 African economies within five (5) monetary and economic blocs of Africa (EAC, ECCAS, ECOWAS, AMU/MENA, and SADC), including Djibouti and Ethiopia. This study determines if money supply growth is influential across economies in Africa. The autoregressive distributed lag (ARDL) bound testing cointegration approach developed by Pesaran et al (2001) was employed to test money superneutrality in this study. Relevant time series annual data of money supply growth, and real GDP growth and inflation spanning over a period of 42 years between 1980 and 2022 were sourced and applied for 53 African countries under the study. Findings and results generated from the ARDL estimation results produced evidence to suggest that money is not superneutral in monetary policy outcomes and implementation virtually all the economies of Africa evaluated, from both perspectives of the influence of money supply growth on real output and on inflation. However, it is necessary to state that the assessments of the influence of money supply growth on inflation rate yield establish the relevance of money across African economies.
    Keywords: Money Neutrality, Money Superneutrality, ARDL, EAC, ECCAS, ECOWAS, AMU, MENA, SADC
    JEL: E4
    Date: 2023–09–07
  2. By: Abounabhan, Mary; Diouf, Awa; Santoro, Fabrizio; Sakyi-Nyarko, Carlos; Scarpini, Celeste
    Abstract: This study investigates the intricate dynamics surrounding the implementation and reception of mobile money taxes, focusing on Ghana as a case study. Consumer-level mobile money taxes, particularly controversial, have sparked large-scale protests, prompting policy revisions in various countries, including Uganda, Cote d'Ivoire and Benin. Ghana’s electronic transfer levy (e-levy) not only followed this trend of public dissent, but also triggered the country’s first budgetary rejection since 1981. The particularly strong reactions, followed by two rounds of revisions, makes understanding what lies behind public perceptions especially important to inform the ongoing debate within Ghana and the region.
    Keywords: Finance,
    Date: 2024
  3. By: E. Zigah; M. Barry (Service de dermatologie [Bordeaux] - Université Bordeaux Segalen - Bordeaux 2 - CHU Bordeaux - Hôpital Haut-Lévêque [CHU Bordeaux] - CHU Bordeaux, Histologie et Pathologie Moléculaire - Université Bordeaux Segalen - Bordeaux 2, Department of Mathematics and Statistics [Boston] - BU - Boston University [Boston], Service de dermatologie Hôpital Saint-André Bordeaux - CHU Bordeaux, Inserm U1312 - BRIC - BoRdeaux Institute in onCology - UB - Université de Bordeaux - INSERM - Institut National de la Santé et de la Recherche Médicale); Anna Creti (EconomiX - EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique, LEDa - Laboratoire d'Economie de Dauphine - IRD - Institut de Recherche pour le Développement - Université Paris Dauphine-PSL - PSL - Université Paris sciences et lettres - CNRS - Centre National de la Recherche Scientifique)
    Abstract: While it is commonly acknowledged that mini-grids are the new pathway to bridging the high electricity access deficit in Sub-Saharan Africa (SSA), comparably few studies have assessed how existing regulations and tariff policies in SSA affect their potentials to attract the number of private investments required to scale-up deployments. Private investors' participation is particularly crucial to meet the annual electrification investment needs of $120 billons in SSA. We study the regulatory framework, the tariff structure, and the subsidy schemes for mini-grids in Tanzania. Additionally, using an optimization technique, we assess the profitability of a mini-grid electrification project in Tanzania from a private investment perspective. We find that the approved standardized small power producers' tariffs and subsidy scheme in Tanzania still do not allow mini-grid for rural electrification projects to be profitable. A further study is required to identify successful business models and strategies to improve mini-grids profitability.
    Keywords: Electricity access, Mini-grids, Africa, Clean energy policy, Energy regulation, Pricing
    Date: 2023
  4. By: Kohnert, Dirk
    Abstract: Human activity has transformed the planet at a pace and scale unprecedented in recorded history, causing irreversible damage to communities and ecosystems. Countries have focused their capacities on economic growth, with too little attention to externalities in terms of environmental quality. The world will not avoid catastrophic warming unless wealthy nations accelerate their reduction of own emissions and help poorer countries to do the same. North America and Europe have contributed 62 % of carbon dioxide emissions since the industrial revolution, while Africa has contributed only 3%. However, it is in sub-Saharan Africa (SSA) that the impacts are most severe and the people most vulnerable. Developed countries, in their own interests, should focus on ways to help developing countries phase out fossil fuels and transition to renewable energy. However, there are tensions between richer and poorer nations over who should pay the costs of global warming. Rich countries have a responsibility to act more quickly than their low-income counterparts. Yet governments continue to subsidise the use of fossil fuels, and banks and companies still invest more in polluting industries than in climate solutions. The consumption habits of the richest 10 % of people generate three times more pollution than those of the poorest 50 %. Emerging economies such as China and India, which plan to achieve net-zero emissions by 2060 and 2070 respectively, should join the developed world in accelerating emissions reductions. It is not just the way we produce and use energy that needs to change quickly. It's the way we consume food, the way we protect nature. It's everything, everywhere, all at once. The agricultural sector is particularly vulnerable, especially in SSA countries where agriculture is central to the economy. Among the top eight countries with the highest cumulative net emissions from agriculture, forestry and other land use are two SSA countries, Nigeria and DR Congo. Most of these emissions are embodied in trade and are caused by consumption in regions such as Europe, the United States and China. The establishment of the Loss and Damage Fund agreed at COP27 will not be enough to turn the tide, nor will it necessarily translate into climate finance commitments, given the lack of progress in delivering the promised US$100 billion in annual climate finance from rich countries. African countries themselves need to reflect on their own strengths and step up their efforts in a timely and substantial way.
    Keywords: Environmental sustainability; Carbon neutrality; climate change; Carbon dioxide; environmental pollution; greenhouse gas; fossil fuel; renewable energy; Governance; European Union; highly industrialized countries; emerging economies; BRICS; Sub-Saharan Africa; South Africa; Nigeria; DR Congo;
    JEL: E21 E22 E23 E26 F18 F54 F64 G38 H23 H84 H87 I15 I31 K32 N17 N37 N57 O13 O44 O55 Q54 Z13
    Date: 2024–02–18
  5. By: Mahar, Hamad
    Abstract: This paper studies the impact of granting formal legal protection to children on their health by studying the impact of the Child Rights Act in Nigeria. Using a Difference in Differences model that is robust to the staggered adoption of this reform across states, I show that granting formal protection to children leads to a reduction in stunting and has limited positive effects on vaccinations. I provide suggestive evidence that the mechanism behind these results is a change in the demand of care by parents. These findings suggest that secular laws which grant protection improve outcomes for children in a society where harmful traditions persist.
    Date: 2024–01–26
  6. By: Cedrick Kalemasi Mosengo (University of Kinshasa, the DRC); Christian Zamo Akono (University of Yaoundé 2, Cameroon)
    Abstract: The aim of this study is to assess the effect of informal employment on the occurrence of overeducation in developing countries, focusing on the specific case of the DRC. Using employment data, we determine the incidence of overeducation and we isolate the role of informal employment as a determinant of overeducation. To measure overeducation, we mainly use the normative (adequationist) approach. We find an incidence of overeducation in the order of 33.3% in the DRC labor market. The econometric results based on recursive bivariate Probit suggest a positive and significant effect of informal employment. The results found are robust even when using the statistical approach as an alternative measure of overeducation. These findings suggest a set of measures likely to reduce the incidence of overeducation on the labor market. These should focus on the formalization of informal sector employment and policies to improve labor market matches.
    Keywords: Skills mismatch, Overeducation, Undereducation, Informal employment
    JEL: E26 E24 I21 J24
    Date: 2024–01

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